Five power plants, including two of state-run NTPC and one of Torrent Power, today won the government subsidy worth about Rs 278 crore to buy imported LNG...

Torrent Power Ltd, NTPC and Gujarat Industries Power Company Ltd quoted Rs 1.94 per unit, a source said. (Reuters)

Five power plants, including two of state-run NTPC and one of Torrent Power, today won the government subsidy worth about Rs 278 crore to buy imported LNG to make up for shortfall in domestic supplies.

On the second day of the auction for government support to power stations with inadequate supply of natural gas from domestic fields, Torrent, NTPC and Gujarat Industries Power Co quoted lower tariff than the base rate for generating electricity from imported LNG.

In the reverse bidding, companies were asked to quote variable cost of power using imported LNG. The auction was conducted on the MSTC platform.

Torrent Power Ltd, NTPC and Gujarat Industries Power Company Ltd quoted Rs 1.94 per unit, a source said.

As many as 11 power plants had qualified in technical round to participate in today’s auction for the domestic gas-based projects (DGP).

The successful bidders included NTPC Ltd’s Dadri and Auraiya plants.

All the five plants, which will get R-LNG supplies, will generate 1.43 billion units of electricity during the period from October 1, 2015 to March 31, 2016.

As per the tender document, the tariff for this round of the bidding was fixed at a maximum of Rs 3.39 per unit.

Yesterday, 13 stranded gas-based power plants with an installed capacity of 8,262.08 MW had emerged as successful bidders for government subsidy worth Rs 1,590 crore for buying imported LNG to restart their plants.

These 13 plants would generate 11.03 billion units of electricity which will be supplied at or below Rs 4.70 per unit to discoms from October 1 to March 31, 2016.

The grid connected gas-based power generation capacity in the country is 24,150 MW. Of this, a capacity of 14,305 MW had no supply of domestic gas. This comprises of 29 plants that were eligible to participate in the auction held yesterday.

The successful bidders will be issued letter of award on September 17.

Under the plan, liquefied natural gas (LNG) will be imported and cash-strapped state power distribution companies will be financially supported to buy electricity from them.

Power plants rarely use costly imported LNG as electricity produced from the fuel would cost much more than that from a domestic coal-fuelled plant or a domestic gas-fired plant, and there would be no takers for such expensive power.